Polls predict hung Indian parliament

The Indian stock market went into freefall today after general election exit polls predicted a hung Parliament – which some feared could hurt the current agenda of economic liberalisation.

The polls showed the opposition Congress party led by Sonia Gandhi, the Italian-born widow of assassinated prime minister Rajiv Gandhi, was likely to rebound from its devastating defeat in the 1999 elections.

An exit poll by the New Delhi Television, a private news channel, predicted a hung parliament with Prime Minister Atal Bihari Vajpayee’s governing alliance winning 235-255 seats, falling short of the 272 majority mark and down from the 303 seats it won in the last election.

It predicted Congress and its allies would win 190-210 seats, up from 113 last election.

Vajpayee dismissed the exit polls.

“We are confident that people will vote for us so that we could give concrete shape to our dream of making India a great nation,” Vajpayee told an election rally in Rajasthan, a massive desert state which votes in the next round on May 5.

India is the world’s largest democracy and its elections are usually highly charged and tinged with violence.

At least six people were killed yesterday in election-related violence, bringing the death toll to 33 since voting began on April 20,.

The benchmark index of the Bombay Stock Exchange, the Sensex, dived more than 220 points, or 3.7%, on news of the exit polls from yesterday’s voting

“The markets are scared thinking of what will happen to some terrific proposals the government had announced,” said Sindhu Sameer, an analyst with a Bombay brokerage firm.

“If the NDA is not voted back, the markets are worried about what happens to government plans to increase infrastructure spending and reduce customs duties,” he said.

Vajpayee’s party had gone into the election buoyed by an economic growth of more than 8% in the last fiscal year.